An Exchange Traded Fund represents a basket of stocks that is bought and sold on a stock exchange as if it were a single stock. An ETF is usually a 2 or 3 letter stock symbol that trades on the NYSE or AMEX and there are a handful of 4 letter stock symbols that trade on the NASDAQ. You can buy and sell any ETF just like a stock in a brokerage account.

For example, you can buy the xlk etf and it means that you're vested in the following companies:

Top 10 Holdings Portfolio weighting

AAPL Apple, Inc. 12.17%

IBM International Business Machines Corp 7.89%

MSFT Microsoft Corporation 7.30%

T AT&T, Inc. 6.98%

ORCL Oracle Corporation 5.35%

GOOG Google, Inc. 5.17%

INTC Intel Corporation 4.12%

VZ Verizon Communications Inc 4.07%

CSCO Cisco Systems, Inc. 3.68%

QCOM Qualcomm, Inc. 3.56%

History of ETF’s

The first ETF created was SPDR, or "Spiders", which started trading on the market in 1993 and represents the S&P 500 index. Years later, QQQQ, also known as the "Q’s", became available and represented the largest 100 non-financial companies listed on the Nasdaq exchange. The Q’s becomes very popular during the late 90’s when the prices of tech stocks skyrocketed. As of October 10, 2008 there were 790 ETF’s

If you want to find out in which etf a stock belongs to, the best place to go is www.thestreet.com, enter the stock, e.g., aapl and click on the link that says:

ETF's holding AAPL